Loan Write-Offs Soar as Arrears Rise

Staggering Numbers

A major financial institution has written off over 10,000 loans worth more than $50 million in the past year alone. This alarming trend is attributed to a surge in loan arrears, with nearly 30% of all loans now more than 90 days in arrears.

Loan Arrears: The Root Cause

• The institution has seen a significant increase in borrowers failing to meet their repayment obligations
• Nearly 30% of all loans are now more than 90 days in arrears, leading to concerns about the institution’s ability to recover its investments

“We are working closely with our borrowers to address the issue, but it’s clear that we need to take a more proactive approach to managing loan risk,” said a senior executive at the institution.

Accounting Irregularities

The audit also uncovered some disturbing discrepancies in the institution’s accounting practices, including:

• Irregularities in the calculation of loan write-offs
• Inconsistencies between numbers reported by branches and those recorded at Head Office

“This raises serious questions about the accuracy of our financial reporting,” said the auditor.

Governance and Risk Management Concerns

The findings have sparked concerns about the institution’s governance and risk management practices, with many calling for greater transparency and accountability.

Response to Audit Report

In response to the audit report, the institution has vowed to take immediate action to address the issues raised, including:

• Implementing new procedures for loan write-offs
• Improving internal controls
• Enhancing transparency and accountability

The institution is committed to regaining the trust of its stakeholders by addressing these critical issues and implementing necessary reforms.